Nestlé- Baby Milk and Other Ethical Issues Briefing Note
Briefing Paper on the Ethical Issues Concerning the Marketing of BreastMilk Substitutes, and Other Ethical Issues Relating to Nestlé
Introduction
This briefing paper has been produced by the Central Finance Board of the Methodist
Church (CFB). It attempts to set out the ethical issues, not to reach conclusions. Where
any opinions appear to be given they should not be viewed as representing CFB policy.
Similarly, they should not be considered as representative of the views of the Methodist
Church in general or the Public Life and Social Justice team in particular.
It constitutes the initial stage of a consultation process designed to enable the Methodist
Church through its Joint Advisory Committee on the Ethics of Investment (JACEI) to assess
the ethical suitability of Nestlé as a potential investment, and to advise the Central Finance
Board of the Methodist Church accordingly. The consultation will pay particular attention to
Nestlé’s performance with respect to the International Code of Marketing of Breast-milk
Substitutes. Other aspects of Nestlé’s business will also be considered in arriving at a
conclusion.
Contents
The structure of this paper is as follows:
1.
2.
3.
4.
5.
6.
Review of Key Ethical Issues Concerning Breast-Milk Substitutes
Nestlé Policy on Infant Formula Marketing
Criticisms Raised by Baby Milk Action
FTSE4Good’s Criteria on Infant Formula Marketing
The Methodist Church’s Position on Breast-Milk Substitutes
Other Ethical Issues Relating to Nestlé
1.
1.1
Analysis of Key Issues Relating to Breast-milk Substitutes
Definitions
The major ethical concern regarding Nestlé relates to the marketing of breast-milk
substitutes, as described in the International Code of Breast-Milk Substitutes.
These concerns essentially refer to milk-based substitutes, although there is a
dispute between campaigning groups and manufacturers whether they also apply to
‘complementary infant foods’ such as fruit juices and infant cereal. Manufacturers
such as Nestlé deny that fruit juices and infant cereal are covered by the Code,
whereas Baby Milk Action insists that they are.
The controversy relating to milk-based nutritional products described in this
briefing paper refers exclusively to standard infant formula. It is important to
distinguish between standard formula and other nutritional supplements. Milkbased nutritional supplements are mostly used to feed individuals with impaired
digestive systems. These include premature babies, children, or adults with
diseases of the digestive system, people with HIV/AIDs, and the elderly who can no
longer eat ordinary food. As such products are clearly life-enhancing and are not
controversial.
The whole question of the production and sale of standard infant formula products
is, on the other hand, hugely controversial. Certain groups and individuals believe
that the benefits of breastfeeding are so great that sales of standard infant formula
products should be strongly discouraged, if not banned. Infant formula is produced
by 26 companies, but the standard formula market is dominated by three
companies. Nestlé is the largest, trading under the ‘Nestlé Nidina’ and ‘Nestlé
Beba’ labels in Europe, and ‘Nestlé Nan’ in Africa. Second largest is the US
pharmaceutical company Wyeth (formerly known as American Home Products)
which sells the ‘SMA’ and ‘Nursoy’ brands, followed by the Dutch company Numico
which trades under the Nutricia label. It should be noted that both Nestlé and
Wyeth are also leading producers of other nutritional supplements.
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
1.2.
Infant Formula in Developed Countries
From the beginning of the twentieth century until the 1960s medical opinion in
developed countries such as the UK favoured bottled infant formula over breastfeeding. There were a number of reasons for this. It was thought that boiling
bottled feed made it more hygienic than breast-milk. As a result of the Great
Depression of the 1930s, and wartime austerity in the 1940s, many children in the
US and Europe suffered from malnutrition. Hence governments at that time
thought it desirable for babies to grow as rapidly as possible, so infant formula,
which may have a higher calorific value than breast-milk, was the preferred choice
of many doctors.
However since that time the consensus of medical opinion has swung round so that
breast-milk is now regarded, without doubt, as the best choice for young babies.
There have also been other major changes in standard medical advice about the
best way to breast feed. Until the 1970s many doctors advocated ‘training’ the
baby by limiting feeding to once every four hours, but now it is accepted that
babies, particularly young ones, should be fed upon demand.
It is generally accepted that in normal circumstances breast-milk provides the ideal
nutrition for babies prior to weaning. However, the primary reason for advocating
breastfeeding lies in the fact that in the first six months of life an infant’s immune
system is not fully developed. The child’s mother’s milk contains her antibodies
which help the infant fight infection; if both the mother and baby are exposed to
an infection, the mother’s immune system automatically produces antibodies which
protect the baby. Obviously standard milk formula cannot contain such custommade antibodies. It is for this reason that the World Health Organization
recommended in 2001 that mothers should exclusively breast feed for the first six
months, but that they could then use breast-milk substitutes until the baby was
fully weaned at 18 months - 2 years.
The benefits of breastfeeding as regards anti-bodies are unquestioned. However,
medical science suggests that there are a number of other additional health
benefits from breast-feeding, particularly in terms of reduced risk of childhood
diabetes and allergic diseases such as asthma. It is also claimed that breastfeeding
helps develop an emotional bond between mother and child, which is beneficial for
the later psychological development of the child. Lastly, research indicates that a
prolonged period of breastfeeding is also beneficial for the mother in terms of a
slightly reduced risk of breast cancer.
However, apart from the important exception of antibodies in the first six months
of life, the medical benefits from breastfeeding compared to using infant formula
in developed countries are not particularly great. The campaign against standard
formula baby milk is based upon the principle that ‘breast is best’. However, this
seems to ignore the social changes that have taken place in Europe and North
America over the past thirty years. It might have been possible for most Western
women to breastfeed their newborn babies every few hours in the 1950s, when they
stayed at home. Now, it is simply impractical, if not impossible, for women who go
out to work to breastfeed their child exclusively. While a minority of women may
work in places where crèches are readily available, for most women such an option
is not available. In such cases the use of standard formula milk-based feeds are
essential, unless society decides that a women’s right to work should be
downplayed, as it was in developed countries in the 1950s, and may be today in
some developing nations.
1.3
The Use of Infant Formula in Developing Countries
The above issues are also applicable to the sales of infant formula in developing
countries. However, there are also very real concerns which are specific to
developing countries. In particular they relate to the marketing of infant formula
in countries where there is no general access to pure water. There is little dispute
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
that standard infant formula is safe in developed countries where high quality
drinking water is available, and where bottles and preparation equipment can be
effectively sterilised.
In developing countries these factors are often not present, so using impure water
can easily lead to the baby developing stomach infections such as amoebic
dysentery. In adults such infections are unpleasant, but the patient usually
recovers. However for a young child they can be fatal. It is alleged that during the
1960s and 1970s when infant formula was widely used in developing countries, the
use of such products may have resulted in the deaths of hundred of thousands, if
not millions, of babies each year. Baby Milk Action claims that this is still the case.
Its website alleges that:
"Marketing practices that undermine breastfeeding are potentially
hazardous wherever they are pursued: in the developing world, WHO (the
World Health Organization) estimates that some 1.5 million children die
each year because they are not adequately breastfed. These facts are not
in dispute."
(With regard to the above quotation from Baby Milk Action, Nestlé point out that
the WHO has referred to infant death from malnutrition or water-borne disease,
but it has never made any official statement about infant death being due to infant
formula marketing.) It seems fair to state that the marketing standards of the
leading infant formula companies in developing countries in the 1960s and early
1970s were well below what would now be deemed acceptable. (This is of course
true for many other industries with ‘legacy issues’.) A number of accusations have
been made about marketing practices used in that time:
a)
b)
The use of strident marketing campaigns stating that infant formula was
better for babies than breast-milk, despite all evidence to the contrary.
Handing out free samples to new-born mothers, as well as to health
professionals.
Giving free samples to mothers of new born babies in hospitals is a particularly
iniquitous practice, as if a mother stops nursing a baby for more than a few days,
she loses the ability to produce breast-milk. In many developing countries infant
formula, like most Western consumer goods, is very expensive compared to average
incomes. In other words, giving mothers free samples of infant formula in the
hygienic environment of a hospital will cause her breast-milk to dry up. Once she
returns home, she will have no alternative but to try and feed her baby on infant
formula, even though this could often be made with dirty water that might lead to
dysentery. It is well documented that many families in developing countries lack
the income required to purchase enough formula to adequate feed a baby, so that
the provision of free samples of infant formula could lead to babies suffering severe
malnutrition, and even death by starvation. However, it is also documented that
instead of breast-milk some babies may receive cow’s milk, goat’s milk, plain tea,
sugar water, rice water or plain water that may also be detrimental to their
healthy development.
That said, it is important to note the massive rise in the standards of living which
has occurred in many developing countries over the last thirty years, particularly in
South East Asia. In countries such as Thailand, Taiwan, and South Korea rapid
economic growth has meant that in urban areas at least clean water is now
generally available and incomes are high enough to make infant formula an
affordable item for most people. One aspect of this process of rapid development
has been economic empowerment for women, an increasing number of whom are
entering professional and business life. In poor agricultural societies where the
vast majority of men and women work on the land, and live nearby, breastfeeding
is a relatively easy option. Once women have prolonged commutes to work in
nearby cities, with minimal provision of crèches and nurseries, leaving their babies
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
at home with relatives, to be fed on infant formula, is the only practical
alternative. In Western Europe maternity leave legislation economically empowers
women who wish to stay at home and breastfeed their babies in the first six months
to do so. In developing countries such legislation may not exist.
1.4
History of Growing Concern over the Marketing of Breast-milk Substitutes
There was growing public concern about the marketing of infant formula in
developing countries from the early 1970s onwards. In the UK this was led by the
development charity War on Want. In 1976 War on Want produced a report, The
Baby Killer, alleging that the aggressive marketing campaigns of Nestlé and other
companies producing breast-milk substitutes was responsible for significant infant
death.
Public concern grew In the second half of the 1970s which led to many nongovernmental organizations (NGOs) advocating a boycott of Nestlé and Wyeth
products. It also led to a US Senate Inquiry into the subject in 1977. Finally, in
1981 two international organisations got together to devise an International Code of
Marketing of Breast-milk Substitutes. These were the United Nations Children’s
Fund (UNICEF) and the World Health Organisation (WHO). The Code was adopted
by the WHO’s 34th Assembly in May 1981. The preamble to the Code states that:
‘Considering that when mothers do not breastfeed, or only do so partially,
there is a legitimate market for infant formula and for suitable ingredients
from which to prepare it; that all these products should be made accessible to
those who need them through commercial or non-commercial distribution
systems, and they should not be marketed or distributed in ways which may
interfere with the protection and promotion of breastfeeding;
Recognising further that inappropriate feeding practices lead to infant
malnutrition, morbidity and mortality in all countries, and that improper
practices in the marketing of breast-milk substitutes and related products can
contribute to these major public health problems’.
The key points of the Code as established in 1981 were:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
No advertising of breast-milk substitutes.
No free samples or supplies are to be given to mothers.
No promotion of products through health care facilities.
No contact between company marketing personnel and mothers.
No gifts or personal samples to health workers.
Information to health workers should be scientific and factual only.
All information on artificial feeding, including the labels, should explain
the benefits of breastfeeding and the costs and hazards of artificial
feeding.
Unsuitable products should not be promoted for babies.
Babies should not be depicted on infant formula packaging.
Labels should be set out in local indigenous languages.
In 1984 Nestlé agreed to accept and adhere to the Code, and at that time many of
the various NGO boycotts were ended. The implementation of the Code in
developing countries was put in place by Nestlé through the Nestlé Instructions,
which were developed in consultation with WHO and UNICEF. However, in 1986
NGOs alleged that Nestlé and Wyeth were in breach of the Code’s spirit, if not its
letter, by switching from advertising to giving free samples to hospitals in
developing countries. In 1986 the WHO Code was tightened up to prohibit the
giving of such free samples. At the same time the International Baby Food Network
(IBFAN), the parent grouping of Baby Milk Action in the UK, announced a second
boycott of Nestlé and Wyeth products on the grounds that the company was
untrustworthy, a boycott which continues to this day. In 1993 Nestlé announced
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
that it would not permit free samples to be given unless specifically requested by
Governments for certain restricted social welfare cases.
1.5
HIV/AIDs
The prevalence of HIV/AIDs in sub-Saharan Africa has brought forward a new ethical
question concerning the supply of standard infant formula. According to the
charity Medecins Sans Frontieres HIV/AIDS currently infects more than 2.5 million
children world- wide. In 2003 700,000 children were newly infected with the HIV
virus, 90% of these in sub-Saharan Africa. Half of all children with HIV die before
they reach the age of two.
It is known that an HIV infected mother has a 20% chance of passing the virus onto
her baby through her breast-milk, and it is estimated that in 1990-2000 1.7m
infants in Africa were infected with HIV in this way. Up to December 2000 it is
estimated that 3.8 million children have died from AIDs, with 3.4m of these being
infected by their mothers, with some 1.1-1.7m infected solely through drinking
breast-milk infected with HIV. In sub-Saharan Africa it is believed that 90 out of
every 1,000 pregnant women are HIV positive. Of these 90 pregnancies, 27-36
babies are expected to contract the HIV virus in utero, during labour, or through
breast-milk. In this context the provision of free infant formula could save infant
lives on a substantial scale, rather than the opposite.
According to an article in the Wall Street Journal (5th December 2000), in 2000 the
two largest formula producers, Nestlé and Wyeth, offered to give free infant
formula in tightly controlled circumstances to HIV infected mothers in southern
Africa, including the use of generic packaging with no reference to either company.
This offer was refused by the United Nations Childrens Fund (UNICEF), calling it a
breach of the Code. Wyeth and Nestlé were therefore inhibited from supplying free
infant formula on the grounds that UNICEF would have accused them of breaching
the WHO Code. UNICEF’s Director Carol Bellamy told the Wall Street Journal:
‘We don’t believe that Nestlé and the other major formula makers have a
particular role to play in the AIDs crisis. What they should do is comply with
the (WHO) code.’
At same time UNICEF’s sister organisation, UNAIDS, was critical of this decision. In
many sub-Saharan countries even a small portion of standard formula often costs
more than an average family’s weekly income. Hence the provision of free formula
is crucial if infant formula is to play an important role in the prevention of HIV
infection via infected breast-milk. UNAIDS Director Peter Piot was quoted in the
Journal as saying that UNICEF:
‘They’re having difficulty accepting that the world has changed’….the UN must
look beyond the fierce battles of the past in an effort to save lives.’
In 2001 the World Health Assembly adopted Resolution 54.2, which calls for action:
‘To recognize and assess the available scientific evidence on the balance of risk
of HIV transmission through breastfeeding compared with the risk of not
breastfeeding, and the need for independent research in this connection; to
strive to ensure adequate nutrition of infants of HIV-positive mothers; to
increase accessibility to voluntary and confidential counselling and testing so
as to facilitate the provision of information and informed decision-making; and
to recognize that when replacement feeding is acceptable, feasible,
affordable, sustainable and safe, avoidance of all breastfeeding by HIVpositive women is recommended; otherwise, exclusive breastfeeding is
recommended during the first months of life; and that those who choose other
options should be encouraged to use them free from commercial influences.’
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
In summary, where replacement feeding is feasible this is recommended for HIVinfected mothers. Where it is not, exclusive breastfeeding is recommended.
At the European Parliament Public Hearing into Nestlé marketing of breast-milk
substitutes held at the European Parliament in November 2000, UNICEF stated:
‘Many people have questioned the continued relevance of the Code in the
context of mother-to-child transmission of HIV through breastfeeding. Let me
assure you that there is an even greater need to ensure Code compliance in
areas of high HIV prevalence. The Code protects artificially fed children as
well as those mothers who decide to breastfeed.
One of its aims, as specified in Article 1, is to ensure the proper use of breastmilk substitutes when these are necessary. If incorrectly prepared, infant
formula can be lethal. Over-dilution, the result of unsuitable availability of
formula, leads to malnutrition. Under-dilution can cause serious health
problems such as kidney failure. This is without discussing whether sanitation
and access to clean water, fuel and adequate skills permit safe preparation.’
1.6
Water Availability
The use of impure water in the preparation of infant formula, and the resultant
adverse health risks, plays a key role in the ethical issues surrounding breast-milk
substitutes. It is worth noting that according to the UN 1.1 bn of the world’s
inhabitants lack access to adequate clean water, defined as 50 litres per day for
drinking, washing, cooking, and sanitation. The UN stated that 5m people a year
die from waterborne diseases, of which 2.2m people a year die from diarrhoeal
diseases, most of them infants, due to contaminated water. At the Johannesburg
Global Summit on the Environment in 2002 a commitment was made to halve the
proportion of the world’s population without safe drinking water by 2015.
The UN stated that 30 countries, the majority of them in Africa, account for 87% of
the people without access to safe water. The UN also pointed out that there is
actually plenty of available water in the world, and the provision of adequate
drinking water to the entire world population would require less 1% of the world’s
ground water. However, the problem is the way water it is used. About 70% of the
world’s fresh water goes into irrigation of agricultural land, and in some developing
countries this figure rises to over 90%. It is generally accepted that the provision of
clean water supplies normally involves the development of adequate sanitation
services. It is now recognised that these two goals play a crucial role in economic
development. According to the NGO Water Aid, these issues are also materially
linked to raising the education level, particularly for women. For example, a Water
Aid study in Ethiopia found that providing access to fresh water reduced the time
spent collecting water, a task traditionally allocated to women, from six hours to
twenty minutes per day.
1.7
The Key Ethical Issues relating to Breast-Milk Substitutes.
The aim of this CFB paper is to set out the ethical issues at stake, and not to reach
conclusions. The question of infant formula marketing is complicated, technical,
and the subject of heated debate. This section will therefore attempt to clarify
what we believe are the key ethical issues relating to it:
a) Status of Infant Formula.
One question which needs to be addressed is the moral status of infant formula
itself. Is it a bad thing in itself, like tobacco or gambling, or is it more like alcohol,
where the problems arise from misuse? Many supporters of IBFAN would probably
argue that while theoretically infant formula may not be a bad thing in itself, in
practice it is a substitute for a very good thing, i.e. breast milk.
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
b) Role of Infant Formula in Child Death
It cannot be disputed that hundreds of thousands of young children die each year in
the developing world due to malnutrition or water-borne disease. In the context of
Nestlé is it not important to distinguish between baby deaths that arise from the
use, or misuse, of infant formula due to inappropriate marketing by leading infant
formula producers, and those that are due to other causes. These might include
ignorance on the part of the mother, and the grossly inadequate health care
systems which exist in much of southern Africa. As described in section 1.6 it is
impossible to find pure water in much of Africa. Although the United Nations has
pledged to make clean water available to all of the world’s population, this is a
long way from being achieved.
c) Supplying Infant Formula in Areas of Weak Healthcare Systems.
In other words, how morally culpable are the infant formula producers if they act
as reasonable suppliers of infant formula to countries with grossly inadequate
health care systems such as those in southern Africa, where misuse of their
products then occurs? For the sake of argument, let us assume that they are fully
compliant with the International Code, but that their products are still linked to
child death. If the misuse of standard formula products arises from ignorance or
misunderstanding in the context of inadequate medical systems, is it unfair to
blame the companies for this? It could be argued that infant formula should be
withdrawn entirely from such countries. On the other hand, such a withdrawal
could lead to increased infant malnutrition through replacement of infant formula
by much more inappropriate substitutes such as goats milk, or sugar water. The
prevalence of HIV/AIDs in southern Africa also needs to be taken into account.
d) Compliance with the International Code
One of the key ethical issues surrounding infant formula relates to the extent to
which the formula manufacturers are complying with the International Code. A
large part of the debate relates to the very different interpretations of the Code
made by Nestlé and Baby Milk Action. The complexity of this debate can make it
hard to see the wood for the trees. From an ethical point of view perhaps the key
question could be that while there has been a massive improvement in the
marketing standards used to promote infant formula in developing countries, is this
enough?
e) Social Responsibility Considerations
Another ethical issue concerns broader social responsibility considerations. In other
words are the infant formula producers showing a narrow legalistic ‘compliance’
attitude to the Code, but ignoring broader ethical issues? In particular what should
they do when marketing formula in developing countries with inadequate
healthcare systems. Some critics would argue that it is the role of governments to
legislate or provide guidelines appropriate to the social and developmental context
of the country concerned, where there exists a lack of capacity to implement and
monitor such legislation then, in this day and age, the company must exercise
diligence towards consumers with respect to the use of their products. Indeed they
should do so without needing to be prompted by government, otherwise company
mission statements count for very little.
2.
2.1
Nestlé Policy on the Marketing of Infant Formula
History
Infant formula is one of Nestlé’s oldest products, having been invented by Henri
Nestlé in 1867. It now accounts for less that 2% of total group turnover, but it was
the company’s principal product until the early 1900s. This corporate history
probably explains why Nestlé appears fiercely attached to maintaining its presence
in this area, and why the company feels obliged to argue its case so strongly. Given
the enormous negative publicity that the subject of ‘baby milk’ has generated for
Nestlé over the last thirty years, on a strict cost-benefit analysis it would probably
make sense for the company to exit the standard infant formula market. However,
we suspect that a sense of corporate history probably prevents it from doing so.
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
2.2.
Nestlé Understanding of the WHO Code
Nestlé’s understanding of the WHO code is explicitly set out in a number of
company documents. Such an understanding is key to the extent to which the
company is indeed complying with the Code as set out in the World Health
Assembly (WHA) Resolution 34.22 of May 1981. The following are quotations from
the Nestlé Document, International WHO Action Report, dated April 2003:
•
‘WHA resolutions are recommendations to all member states of the WHO.’
•
‘The Code calls upon governments to take action to give effect to the
principles and aim of this Code, as appropriate to their social and
legislative framework, including the adoption of national legislation,
regulations,
or
other
suitable
measures.’
•
‘ “Resolutions passed after the adoption of the WHO Code have the same
status as the Code- they are recommendations to all of its member
governments.” WHO Director General, Gro Brundtland, 1998. “Neither the
Code nor any resolution has a real impact and a lasting meaning unless
countries implement them according to their national laws and practice.
Member states are sovereign; they may, if they choose, implement WHO’s
recommendations to the letter, they may actually go beyond these
recommendations, or they may simply ignore them together.” ‘
•
‘Nestlé universally follows all countries’ implementation of the WHO Code.
Our decision, two decades ago, to voluntarily and unilaterally implement
the WHO Code as a minimum in all developing countries is due to the fact
that the economic, social, and sanitary conditions in most of those
countries differs substantially from the situation in developed countries
like
the
USA
or
EU.’
•
‘Nestlé voluntarily and unilaterally implements the Code in more than 155
developing countries - we apply the Code to all Infant food products being
marketed or otherwise represented as a breast-milk substitute. That
means starter formula (0-6 months) and in the case of Nestlé it means
follow-on
formula
(6-12
months).
‘
•
‘Nestlé is in voluntary compliance with the WHO Code in all developing
countries (more than 150 nations). We support governments’ efforts to
translate WHO resolutions into national languages. Nestlé has begun a new
monitoring process with governments around the world to ensure
compliance with the WHO Code. An initial Report produced in 1999
contained official statements from 54 governments representing over 50%
of Nestlé’s infant formula sales in developing countries. All provide
evidence that Nestlé complies with the WHO Code as is it is implemented
in that country.’
Nestlé’s interpretation of the Code is based, in part upon a section which says that:
‘Products other than bona fide breast-milk substitutes, including infant
formula, are covered by the Code only when they are “marketed or
otherwise represented to be suitable …for use as a partial or total
replacement of breast-milk .”
The company therefore believes that the Code’s references to products used as
partial or total replacements for breast-milk are not intended to apply to
complementary foods unless these foods are actually marketed- as breast-milk
substitutes including infant formula are marketed – as being suitable for partial or
total replacements for breast-milk.
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
2.3
Recent Developments in Code Guidelines
In May 2001 the WHO changed its recommendation on breast feeding from
‘recommended exclusively for the first four to six months of life’, to ‘recommended
for the first six months of life’. In May 2003 Nestlé announced:
‘In line with our clear support for the new Resolution, Nestlé has consequently
completed label changes on complementary foods to follow six month
recommendation. Nestlé is the only company manufacturing infant formula
and complementary foods to have taken this step, in spite of the risk that this
may put complementary foods at a commercial disadvantage vis-à-vis
competitors’ products.’
2.4
Nestlé’s Policy and Management Control of Infant Formula Marketing
The importance of infant formula marketing to Nestlé is shown by the fact that the
company’s Chief Executive, Peter Brabeck, wrote an introduction to a 2001 Nestlé
paper called Infant Feeding in the Developing World. In it he says:
•
‘Our policy and practice in developing countries since 1984 has meant no
public promotion, including no advertising, no advertising leaflets, no
“milk nurses”, no samples to mothers, and a very restrictive policy on free
formula for evaluation by health professionals. We leave communication
to mothers about infant formula in developing countries completely up to
health professionals.’
•
‘We also carry out annual audits on WHO Code compliance with a sample of
Nestlé companies, and we investigate any substantiated claims made by
those who believe we have broken the Code. Many of these we find to be
inaccurate, but in a company of over 225,000 individuals, mistakes can be
made. If we find that the Code has been deliberately violated, we take
disciplinary action.’
•
‘As CEO, I personally review any reports of Code violation discovered
either in our audits or in the developing world or through reports from
other organisations, and I make sure that the appropriate action is taken.’
Nestlé has also introduced a system of Ombudsmen, i.e. senior managers outside of infant
nutrition to whom staff can report concerns. In other words, the company has put in place
a system to alert Head Office of possible Code violations. These people work in areas like
accounting or public affairs, so they have no incentive to cover up Code breaches.
2.5
Key Elements of Nestlé’s Position on Infant Formula Sales
Unless Nestlé is guilty of major and systemic duplicity, there seems little reason to
doubt that the above statements illustrate the company’s sincere conviction that it
is doing its best to conform to its understanding of the Code. The key elements of
this, in the CFB’s opinion, are the following:
•
Nestlé recognises the Code as a recommendation to governments, and
consisting of advisory recommendations to governments. It is the latter
who have the responsibility to implement it in their own countries through
law and medical standards in the light of their own local conditions.
•
Nestlé believes the Code set out minimum standards in all developing
countries. It does not believe that it applies to developed countries, where
the problem of impure water does not exist, and where powerful regulatory
agencies such as the Federal Food and Drug Agency (FDA) in the US set their
own stringent standards. Nestlé position is that it universally follows all
countries’ implementation of the Code, following its decision more than
two decades ago, to voluntarily and unilaterally apply the WHO Code in
developing countries and regions. In developing countries and regions
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
where there is no local code in place, or if the local legislation is less strict
or precise than the WHO Code, the Code is used as a minimum standard.
Otherwise the local measures apply.
•
Nestlé understands the Code as only applying to breast-milk substitutes.
This means starter formula (0-6 months) and in the case of Nestlé it means
follow-on formula (6-12 months). In the company’s opinion it does not
apply to complementary foods such as fruit juices, infant cereals, and other
non-milk based weaning products.
•
Nestlé believes that it follows the Code principles banning free supplies of
infant formula, which it understands to have particular reference to nursing
mothers. It does believe however that it is allowed to make small samples
of infant formula available to medical professionals for evaluation
purposes.
•
Nestlé accepts the Code ban on the public advertising of infant formula.
However, it believes that the Code allows it to put nutritional information
about its infant formula on the side of formula packets. The Code states
that the label should state ingredients used, composition/analysis of the
product, storage conditions, batch number of date before which the
product is to be consumed. The Code also allows ‘scientific and factual
information’ to be disseminated to health professionals.
To conclude. The company claims that all sales of its global infant formula since
1992 have been in accordance with WHO guidelines. Company policy is that any
breach of the guidelines must be reported to the company Chief Executive, and
that there has not been any significant breach for many years.
As shown in Section 3 of this paper, IBFAN alleges that there have been hundreds of
Code violations by Nestle in recent years. To try and independently assess this, the
CFB has carried out database searches and not found any recent reports in
newspapers or news services accusing Nestlé of significant Code breaches. (The
last definite breach appears to have occurred in Pakistan in 1996, and we
understand that the company carried out stringent disciplinary measures
subsequently, as well as bringing in independent auditors to assess the situation,
and make public their conclusions).
3.0
3.1
Criticisms of Nestlé by Baby Milk Action
Description of Baby Milk Action
Baby Milk Action (BMA) is a non-profit organisation which is the UK arm of the
International Baby Food Action Network (IBFAN). It describes its objective as being:
‘To save lives and to end the avoidable suffering caused by inappropriate
infant feeding. Baby Milk Action works within a global network to strengthen
independent, transparent and effective controls on the marketing of the baby
feeding industry. The global network is called IBFAN, a network of over 200
citizens groups in more than 100 countries. A marketing code was introduced
in 1981 to regulate the marketing of breast-milk substitutes. Companies
continue to violate its provisions - see examples here. Find out how Baby Milk
Action works to stop them and how you can help.
In other words, BMA could be described as a campaigning organization which sees
its role as fighting for what it sees as the undeniable good of breastfeeding. There
is an adversarial tone to much of its material, with a sense that it is a small NGO
trying to achieve its aims despite what it sees as obfuscation by huge, rich
companies such as Nestlé and Wyeth.
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
IBFAN'S Seven Principles
•
The right of infants everywhere to have the highest level of health.
•
The right of families, and in particular women and children, to have enough
nutritious food.
•
The right of women to breastfeed and to make informed choices about
infant feeding.
•
The right of women to full support for successful breastfeeding and for
sound infant feeding practices.
•
The right of all people to health services which meet basic needs.
•
The right of health workers and consumers to health care systems which are
free of commercial pressures.
•
The right of people to organise in international solidarity to secure changes
which protect and promote basic health.
3.2
Activities of BMA/ IBFAN
Like many NGOs BMA and IBFAN carry out a number of related activities. However,
its major function is the production of regular and detailed monitoring reports on
what it describes as ‘baby milk’ marketing throughout the world based upon
IBFAN’s global network of contacts. IBFAN’s most recent monitoring report was
Breaking the Rules, Stretching the Rules 2004, produced in May 2004. It was
claimed that this report: ‘Documents how baby food companies idealise their
products, ignoring the negative health impact of artificial feeding’.
BMA also carries out political lobbying. It presented the evidence from its Breaking
the Rules report to the House of Commons on 13 May 2004. The meeting was
hosted by Lynne Jones MP who has tabled an Early Day Motion (a petition for MPs)
calling for the UK Government to support action to end baby food marketing
malpractice in the UK and in other countries. BMA stated that this proposal
received significant support across political parties.
IBFAN and BMA also provide expert witnesses to argue its case on a technical basis.
For example it sent a delegation in May 2004 to the Geneva meeting of the World
Health Assembly discussing current concerns in infant and young child nutrition.
IBFAN experts presented evidence on bacterial contamination of powdered formula
and the increased use of bogus health claims to promote artificial feeding.
3.3
IBFAN’s Current Monitoring Document
The Breaking the Rules, Stretching the Rules 2004 Report monitored and analysed
the promotional practices of 16 transnational baby food companies and 14 bottle
and teat companies between January 2002 and April 2004. The benchmark
standards used for measuring marketing practices were the International Code of
Marketing of Breast-milk Substitutes and subsequent, relevant World Health
Assembly (WHA) Resolutions. The criteria used in producing this Report were to
analyse infant marketing on the basis of ‘defending breastfeeding and ensuring
that breast-milk substitutes are used safely, if necessary, on the basis of adequate
information and appropriate marketing’.
Some 3,000 complaints were received from monitors in 69 countries around the
world. After legal checking about 2,000 violations were reported in Breaking the
Rules and many of these came with photos. Yeong Joo Kean, IBFAN's Legal Advisor
said:
"We have 712 pictures of actual violations in the report. There is no way
that the companies can deny that they were found in flagrant violation of
the Code and Resolutions."
The main criticisms of the food companies in the Report were as follows:
•
'Functional' claims. Companies try to differentiate their formulas by adding
a string of additives and then claiming performance benefits for these.
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
•
•
•
•
•
3.4
Free and low-cost supplies continue.
Exclusive breastfeeding for 6 months continues to be undermined by most
companies.
Information to health professionals. Companies violate the requirement
that this is restriced to scientific and factual matters.
Health facilities and health workers continue to be targeted.
Sponsorship of medical seminars, conferences and associations of medical
professionals is becoming more widespread.
IBFAN Criticisms of Nestlé
The summary of Breaking the Rules identifies Nestlé as controlling 40% of the global
baby food market. It goes on:
‘That dominant position is unfortunately matched with its record as the worst
Code offender. It was the company with the greatest number of reported
violations of nearly all the key provisions of the International Code. Nestlé
maintains it abides by the Code but that means it abides by its own in-house
‘Instructions’ which fall short of the International Code. Even within its own
narrow interpretation of the Code, Nestlé violates several provisions by
promoting infant formula and follow-up formula and by disseminating
information materials which are more promotional than ‘scientific and factual’
as required by the Code. In countries where the Code is not enforced like
Thailand and Armenia, Nestlé and other companies shower gifts on health
workers and mothers.’
Breaking the Rules has a detailed dossier on Nestlé and other infant formula
companies. Regarding Nestlé it makes the following detailed allegations:
a)
Articles 5.1 and 5.4 of the Code prohibit advertising, promotion, and the
gift
of
free
samples
to
mothers.
Nevertheless, a Nestlé distributor is accused of promoting Nestlé Nan by
the internet in Argentina. Other allegations include claims that: a Swiss
supermarket magazine promotes Nestlé Beba 2 and has a picture of a happy
mother and child, and a parents’ magazine in Luxemburg advertises Beba
Sensitive with the claim that it is: ‘nearly lactose free and suitable for
infants who are sensitive to lactose’. In Thailand Nestlé is accused of
giving out free samples of Lactogen to mothers at home.
b)
Article 5.3 of the Code bans promotional devices at the point of sale.
Nestlé is accused of having special posters of Nan in Armenia, and of having
sent out sales reps in China. It is accused of handing out samples of
Lactogen and Nan1 in shops in Thailand.
c)
WHA Resolution 47.5 (1994) urges and end to free or subsidised donations
to products to all parts of the health care system.
It is alleged that Nestlé donates unsolicited Nan 1 formula in China, and
gives free samples of Nan Soya to mothers in Argentine health facilities. It
provides free samples of Lactogen 1 and Nan1 to health facilities in
Thailand, and actively promotes Nan 1 and Lactogen 1 to pregnant women
there.
d)
Code Article 7.3 prohibits financial or material inducement to health
workers.
It is alleged that Nestlé gives free gifts of Nestlé mouse pads and diaries to
health workers in Colombia and Costa Rica. The Report states that in
Armenia Nestlé gives free baby suits to hospitals with the words ‘I love my
mum’, next to a Nestlé logo. In Indonesia it is accused of distributing
posters, diaries, calendars, stationery, and materials on infant care to
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
health facilities which are displayed in waiting rooms and doctors’ offices.
e)
Article 9 of the Code requires labels NOT to discourage breastfeeding, and
to inform about the correct use of the product and the risk of misuse.
The Report accepts that in most developing countries Nestlé’s formula
labels do comply with the Code’s requirements, but ‘in small print’.
However, it accuses the company of repeatedly violating Article 9 by
making what it calls’ idealising statements’. For example, in China Nestlé
Nan 1 labels say: ‘Choose quality food, choose Nestlé’. The Finnish label
for Nan claims that it can: ‘be used from birth as an addition to breastmilk, or to substitute it’. In South Africa, the Lactogen 1 label is alleged to
imply the product has the same benefits as breast-milk by the claim that it:
‘Has all the vitamins and minerals required by an infant for growth and
development.
f)
Article 4.2 of the Code prohibits information material to have text or
pictures which idealises the use of breast-milk substitutes. Article 7.2 only
allows product information which is factual and scientific.
Breaking the Rules notes that most Nestlé materials are marked ‘for the
medical profession’, but accuses them of failing to meet the requirements
of articles 4.2 and 7.2. In Argentina the company is accused of promoting
Nan in professional journals in idealistic terms, e.g. ‘closest to mother’s
milk at lowest price’. A poster at a paediatric congress in Argentina had
the slogan: ‘The most intelligent choice when it is necessary to replace
breast-milk; so intelligent that it even prepares itself.’ In Armenia a
Nestlé hospital leaflet is alleged to claim that Nan is a fully adapted infant
formula, and is close to human milk in content and digestibility.
(g)
WHA Resolution 54.2 (2001) recommends exclusive breast feeding for six
months.
Breaking the Rules welcomes the fact that Nestlé is the only infant formula
manufacturer to agree to change its labels in response to the above
recommendation. However, the Report alleges that although Nestlé
claimed to be fully compliant with the recommendation by April 2003, in
fact there were several examples of it not doing so.
Nestlé has not produced a formal response to the Breaking the Rules report, although one is
expected later in the year. However, they have shared their preliminary conclusions with
us. The company notes that although the report is dated 2004, many of the allegations are
very old, some going back to the 1990s. Nestlé has investigated all 200 allegations of Code
violation in the report. They state that of these:
• 88 cases showed no Code violation, as they concerned complementary foods where the
Code does not apply;
• 40 were based upon mistaken data;
• 48 were based upon insufficient data to make an accurate assessment possible. The
company apparently invited IBFAN to supply more information on these cases, but this
did not arrive.
• 17 had some justification, and referred to leaflets sent to healthcare professionals in
South Africa and Thailand. The company claims that it immediately tightened up the
information on these labels.
• 2 concerned infant formula in Armenia, where a poor translation from Russian had
resulted in a technical code violation;
• 1 was a similar mis-translation in Lithuania.
3.5
The Nature of the Debate between Nestlé and Breast-Milk Campaigning Groups
One of the difficulties that make it hard for an independent observer to come to
any conclusion about Nestlé and infant formula marketing is the high level of
emotion displayed by both parties. It seems fair to state that both Nestlé and BMA
passionately feel that they are morally right, and have a high degree of suspicion
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
about the other. Indeed, the CFB understands that for many years Nestlé
executives refused to share a platform with BMA. Apparently, this policy changed
in 2001 and Nestlé has since participated in many debates with BMA. This policy
changed in 2001 and Nestlé has since participated in many debates and meetings
with Baby Milk Action.
We suspect that there may be a tendency for Nestlé executives to dismiss any
accusation made by BMA/IBFAN on the grounds that this is a pressure group whose
whole existence depends upon having corporate targets such as Nestlé to attack.
On the other hand some of BMA’s literature would seem to feed such suspicions in
view of its highly partisan language, which seems to suggest that BMA regards
Nestlé as a ruthless multinational company which seeks to maximise profits at the
cost of infant lives, and is not above deceit to covers its tracks. An example of
this rhetorical tone is shown by an extract from a BMA leaflet below:
‘Nestlé's idealising leaflets in Egypt and Vietnam
We exposed Nestlé leaflets in Vietnam and Egypt which promote Nestlé infant
formulas in an idealising way. We also exposed a Nestlé advertisement in South
Africa which encouraged mothers to attend talks on the 'Nestlé Developmental
Nutrition Plan' given by the 'Nestlé Baby-Care Friends'.
The response below was sent to Baby Milk Action four months after we wrote to
Nestlé. It is likely that we have only received a response as members of the public
have also complained to Nestlé, prompted by our Campaign for Ethical Marketing
action sheet.
Unfortunately the response from Nestlé's Senior Policy Advisor, Beverley Mirando,
demonstrates either ignorance or deliberate dishonesty about the provisions of the
Code and Resolutions. At present the company has no intention of stopping these
violations. Please keep up the pressure on Nestlé to abide by its responsibilities by
supporting our letter-writing campaigns and the Nestlé boycott.
Baby Milk Action has defeated Nestlé in a series of public debates. If Nestlé
attempts to speak at your college or organisation, feel free to invite Baby Milk
Action to come to debate with Nestlé. In the past Nestlé refused to even speak if
we were present in the room, but thanks to pressure from the boycott has backed
down from this position.
For updates on the boycott see the Boycott News supplement to our Update
newsletter. Also see the Latest News section.
The boycott has been launched by national groups in: Australia, Bulgaria, Canada,
Cameroon, Finland, France, Germany, Ireland, Italy, Luxembourg, Mauritius,
Mexico, Norway, Philippines, Spain, Sweden, Switzerland, Turkey, UK and USA).
The boycott will continue until Nestlé abides by the International Code and
subsequent World Health Assembly Resolutions in policy and practice.’
3.6
Relations between Nestlé, and UN bodies like WHO and UNICEF
This polarised and highly controversial debate does not just occur between Nestlé and
BMA/IBFAN. Relations also appear strained between the company and UNICEF. For
example, in 1997 Nestlé Chief Executive Peter Brabeck flew to New York in an attempt to
come to agreement with UNICEF on WHO Code interpretation. Press reports state that
UNICEF Director Carol Bellamy walked out of the meeting halfway through, and her deputy
refused to discuss HIV, instead haranguing Brabeck over Nestlé’s faults. Relations between
Nestlé and UNICEF seem to have been extremely poor ever since. Nestlé sources suggest
that the press reports were exaggerated:
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
‘Mrs. Bellamy did not voice any criticism of Nestlé at the meeting, but rather
listened, then was called out for a telephone call in mid-meeting. She sent a letter
to Mr. Brabeck afterwards closing the door to future dialogue, saying that the
differences between the organisations regarding WHO Code interpretation were
too great to warrant further discussion. However, in spite of these
differences, the previous active conflict between UNICEF and Nestlé has been
relatively dormant in the past 3 years.’
On the other hand, Nestlé has had a positive working relationship with the WHO and FAO on
food safety, helping to design and fund for the past 10 years a food safety education
programme for health professionals in Asia. A senior Nestlé manager serves as Vice Chair of
this. In addition on the obesity issue, Peter Brabeck was one of two CEO’s to accept the
then WHO Director General’s invitation to the first CEO roundtable with the food industry
on obesity and Nestle has had constructive dialogue with WHO ever since. Also the
European Food Industry’s Task Force , chaired by Nestlé, was the first industry body to
come out in support of the WHO global Strategy on Diet, Physical Activity and Health.
3.7 Key points of Baby Milk Action’s Nestlé Criticisms
Baby Milk Action’s criticisms of Nestlé can be classified into two types. The first
are factual examples produced by IBFAN where the company appears to be in
breach of basic Code principles through actions such as providing free infant
formula samples to pregnant women or nursing mothers.
However, the second type are based upon BMA’s very different interpretation of
the role, nature, and scope of the International Code compared to Nestlé.
•
Status of Code. Whereas Nestlé sees the Code as consisting of advisory
recommendations to governments, BMA regards it as having the status of a
global rule book. Is the Code a global minimum standard, or are formula
manufacturers able to work with local governments to meet their local
needs?
•
Geographical
standards in
universally.
requirements
the Code
•
Limitations on Code. Nestlé argues that while the Code refers to ‘all
countries’, this is in the context of the possibility of ‘infant malnutrition,
morbidity and mortality’. Since the latter conditions do not arise in
developed countries, the Code only applies to developing countries. Of
course, developed countries such as the UK tend to have their own detailed
codes
for
marketing
of
infant
formulas
in
hospitals.
•
Application of Code to Developed Countries. Nestlé argues that selling
infant formula in developed countries in ways not compatible with the Code
is therefore acceptable. Baby Milk Action on the other hand argues that this
shows that Nestlé is in breach of it, and is particularly critical of infant
formula marketing in the US and Canada. (Given the powers of the FDA in
the US, and the tendency of the US courts to levy large fines, it is arguable
that
these
countries
can
look
after
themselves).
•
Definition of Breast-milk Substitutes. In Nestlé’s understanding the Code
only applies to breast-milk substitutes, such as starter infant -formula (0-6
months). In BMA’s opinion it applies to all products that might replace
breast feeding, which includes not only formula but complementary foods
such
as
fruit
juices,
and
infant
cereals.
Reach of Code Nestlé believes the Code sets out minimum
all developing countries.
BMA argues that it applies
What happens when local governments implement legal
different from the Code? Is it desirable, or unnecessary for
to be incorporated in each country’s legislation?
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
•
Definition of Advertising. There are also highly technical disputes between
the two sides about the Code ban on the public advertising of infant
formula.
Nestlé argues that the Code allows it to put nutritional
information about its infant formula on the side of formula packets,
whereas BMA accuses it of promotional material ‘idealising’ breast-milk
alternatives. There are extremely technical arguments about the nature of
material on infant formula packaging, i.e. is its role to advise physicians, or
is it trying to unduly influence new mothers?
4.
FTSE4 Good
4.1
Role and Description of FTSE4Good
The FTSE4Good SRI index series incorporates breast-milk substitutes as one of its
key ethical criteria. It therefore provides some independent assessment of this
contentious area.
FTSE4Good is a family of SRI or ethical stock market indices which was launched in
July 2001. FTSE recognised the need for a partner to add SRI expertise to its own
skills in index construction, so the FTSE4Good index series was therefore created in
association with EIRIS. The underlying concept was to construct a broadly based SRI
index for a number of regional markets: the UK, US; Europe, and the world, with
the objective of producing a benchmark to measure SRI fund performance in these
regions. The following exclusions were then used to filter out unacceptable
companies: tobacco producers; companies providing strategic parts or services or
manufacturing nuclear weapons systems; manufacturers of whole weapons systems,
and owners or operators of nuclear power stations and those mining or processing
uranium. The basic philosophy underlying the index was to include only companies
moving towards best practice in the areas of the environment, human rights, and
stakeholder relationships.
4.2
The Role of UNICEF
Against the background of the dispute over the marketing of infant formula it is
important to note that the United Nations Children’s Fund (UNICEF) agreed to be
associated with FTSE4Good in return for the right to nominate three members of
the Advisory Committee. UNICEF also gained the commitment of FTSE to pay it all
the net license income FTSE received from its clients in the first twelve months of
operation, as well as a 50p charge on each trading screen showing the data. FTSE
International hoped that this would generate revenues estimated at $1m (£600,000)
for donation to UNICEF.
4.3
FTSE4Good’s Changed Criteria Relating to Infant Formula
From its inception in July 2001 the FTSE4Good index series excluded on ethical
grounds eight food and pharmaceutical companies producing breast-milk substitutes
on the grounds that they were in breach of the International Code of Marketing of
Breast-Milk Substitutes. These companies were: Abbot Labs; Bristol Myers Squibb;
Heinz; Meiji Milk; Nestlé; Novartis; Nutrimco, and Wyeth.
However in March 2004 the FTSE Group announced that it was lifting its blanket ban
on such companies following an extensive process of public consultation.
FTSE4Good stated that from now on it would use ‘measurable inclusion criteria.’
The announcement stated:
‘FTSE will establish a small Expert Committee, comprising academics and
experts on the industry, which will review company reports to assess whether
they adhere to the FTSE4Good criteria and to make recommendations to the
FTSE4Good Policy Committee as to the continuing eligibility of companies.’
As at October 2004 the CFB inspected list of the companies included in the
FTSE4Good, and it found that none of the eight was included in that list, despite
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
the recent revision to FTSE4Good’s breast-milk substitute criteria. However, it is
possible that UNICEF’s influence has prevented FTSE4Good from doing so.
5.
5.1
The Methodist Church Position
History of Methodist Church position on marketing of breast-milk substitutes.
In 1992 the Methodist Conference adopted Memorial 101, Unethical Marketing
Methods, which urging Methodists to inform themselves about the issues involved
although the Conference declined to support a boycott of Nestlé products. A major
paper discussing the whole subject of breastfeeding was brought to the 1999
Conference (Conference Agenda 19) called What’s Best for Babies? The 1999
Conference approved three related resolutions:
19/1 Conference receives the report and encourages local churches and Methodist
groups to study all the issues and to act accordingly.
19/2 Conference calls on Her Majesty’s Government to incorporate into legislation
the provisions of the WHO Code and the subsequent resolutions of the World Health
Assembly, and monitor their application in the NHS.
19/3 Conference encourages Methodists in Britain to support the Baby Friendly
Hospital Initiative, and further encourages Methodists in conversation with partner
Churches overseas to support BFHI in many countries of the world.
5.2
Methodist Council (2)
The Methodist Council, the executive body of the Methodist Church, was concerned
that the 1999 resolution ‘left the Conference’s position uncertain’. It therefore
submitted a report to the 2000 Methodist Conference called What’s Best For
Babies? (Methodist Council 2). This report was received by the 2000 Conference,
therefore becoming the definitive statement of the Methodist Church’s position on
the issue. This paper noted the following (the following numbers refer to the 2000
Conference Agenda):
3. There is no convincing evidence which points to an accommodation,
understanding or agreement between Baby Milk Action (BMA) and Nestlé in
the foreseeable future.
4. The British Methodist Church has no way independently of adjudicating on
the ongoing disputes between BMA and Nestlé. It remains unwise for the
Church to be aligned unequivocally with one side or other.
The church needs to be in a position where it can exercise a critical role
towards both parties to the dispute, and express its anxieties about the
behaviour of both.
5.0 The irreconcilable conflict between Baby Milk Action and Nestlé has several
dimensions to it.
5.1 The WHO International Code of Marketing of breast-milk substitutes is
designed to protect mothers and health workers from commercial
pressures. The WHO has provoked many interpretations, not to mention
the relationship between the Code and subsequent resolutions of the World
Health Assembly. On the one side are those who insist that the Code must
be applied in every context, irrespective of national law. On the other are
those who insist that the Code requires its claims to be incorporated by
each government into national legislation in realistic and achievable ways
appropriate to their context.
5.2 The disputes about the sort of evidence which might constitute a breach of
the Code, and the means by which evidence is to be tested to assure its
reliability and truthfulness.
5.3 The failure of international bodies to work together towards a common
framework of understanding.
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
5.4 The confusion between mistakes, inadequacies of management action and
intentional malpractice measured against the provisions of the WHO Code.
5.3
Outcome of 2000 Conference
The 2000 Conference:
35/1 Receives the report.
35/2 For the sake of clarity, the Conference records the following judgements:
2.1 In the light of the Christian Gospel, the health, nurture and development of
very young babies and their mothers merits the prayerful and practical support
of Methodists.
2.2 The Conference is not aligned with either side in the disputes between Baby
Milk Action and Nestlé, which have been going on for more than 25 years; the
Conference encourages Methodists, local churches and Methodist groups to
study all the issues and to act accordingly.
2.3 The Conference endorses continuing constructive engagement by members of
the Connexional team with both Nestlé and Baby Milk Action.
6 Other Ethical Issues concerning Nestlé
6.1
Ethiopia
Many people were shocked to read in the financial press in 2001 that Nestlé was
suing the government of Ethiopia, one of the poorest countries in the world, for
damages of $6m relating to nationalisation in the 1970s. In December 2002 Nestlé
CEO Peter Brabeck announced that the dispute had been settled for a total sum of
$1.5, which would be distributed to humanitarian organisations for famine relief in
Ethiopia.
6.2
Coffee Prices
In the 1990s and early 2000s global coffee prices plummeted causing great
economic distress in particular to small coffee farmers. This was due to a serious
over supply caused among other things by expansion of large-scale coffee farm
operations in Brazil and Vietnam. In the late 1980s unroasted coffee beans reached
$3.30 a lb, but by 2003 the average price received by coffee farmers had fallen to
$0.60 a lb, well below the global average production cost of $0.80 lb. For several
years groups like Traidcraft have promoted fairtrade ground coffee brands such as
Café Direct which are produced on the basis of ensuring that their producers
receive a price which gives them a living wage, and enables them to care for the
environment. Café Direct has done well in the UK ground market, with a claimed
market share approaching 10%.
However, the vast bulk of global coffee production is used in instant coffee, which
is dominated by two companies: Kraft (Maxwell House), and Nestlé (Nescafe),
although the US food group Sara Lee has a significant presence in the ground coffee
market. Nestlé isthe world’s single largest coffee buyer, with a global market share
of 14%. In response to the global coffee crisis, various organisations have announced
that they would sell fairtrade coffee. In 2002 the large café chain Starbucks
announced that they would promote Fairtrade coffee. In May 2003 the world’s
largest coffee brokers, Neumann and Volcafe announced an agreement with the USbased Rainforest Alliance with the aim of stimulating the production of ‘sustainable
coffee’, defined as coffee plantations which meet basic environmental and social
requirements. At the end of 2003 Kraft announced plans to sell sustainable coffee,
but to date Nestlé does not appear to have done so.
On the other hand, the company is a member of the Sustainable Agriculture
Initiative and has set up a number of sustainability projects working with small
farmers in Central America and Africa. Nestlé argues that the concentration on
18
Nestlé- Baby Milk and Other Ethical Issues Briefing Note
‘fairtrade’ coffee is misleading, as this is only a minute fraction of the total
market. It believes that its policy of buying more coffee directly from farmers, i.e.
bypassing coffee brokers, is more effective in enabling more of the price to be
passed back rather than being diverted to middle men. The groups’ CEO Peter
Brabeck has lobbyied for structural change in the market place to ease commodity
price fluctuations. Further Nestlé makes approximately half of all Nescafe in the
developing world thus ensuring more of the added value remains in those countries.
6.3
Cocoa Plantations
In 2002 serious and documented allegations emerged that some cocoa, the base
material for chocolate production, was being produced in West Africa using slave
labour, often children. In October 2003 Nestlé put out a statement, Coca Working
Practices, which stated that:
‘Nestlé does not own cocoa farms or plantations in West Africa. Nevertheless
Nestlé is committed to ensuring that coca is grown without the worst forms of
child or forced labour. As part of our commitment, we have partnered with
the global chocolate and cocoa industry and NGOs in an international protocol
that lays out a series of action steps designed to ensure that cocoa is grown in
a responsible manner.’
6.4
Obesity
In the United States the food industry seems to be increasingly targeted by lawsuits
alleging health damage through obesity. Such lawsuits seem modelled on those
filed earlier against the tobacco industry. In the UK there is increasing concern
that the UK population, like those of many other developed countries, is copying US
trends where the majority of the adult population is overweight, and a significant
proportion seriously obese. Obesity is linked to a variety of health problems such
as heart disease and diabetes.
This problem is perhaps most serious when it involves children. Children in the UK
eat less than half the recommended amount of fresh fruit and vegetables each day
and the proportion of primary school children who are overweight doubled between
1984 and 1998 to reach 25%. In turn this has been linked to growing diagnosis of
Type 2 (late onset) diabetes in children, something previously normally experienced
in late middle age. Many health charities are concerned that confectionery
companies are partly to blame for this problem. (There was a major public
controversy in the UK in May 2003 when the UK chocolate company Cadbury’s Get
Active marketing campaign encouraged children to get sports equipment for their
schools by saving chocolate wrappers. It was estimated that children had to eat
160 million bars of chocolate to get equipment worth £9m).
At that time
Dr Wendy Doyle of the British Dietetic Association called for the British Government
to introduce regulations restricting food advertising aimed at children, as is the
case in Sweden. She said:
‘These big food companies have these huge budgets to promote all these things
to children. I am sure it is having an impact - the manufacturers wouldn’t do
it if it did not. Because of the problem of obesity, the Government has to take
an active step to stop children being targeted by advertising.’
Nestlé, like Cadbury, has a range of initiatives aimed at schools. It has supported
grass roots tennis for over 40 years. More recently it has funded through 4Children
the creation of over 600 Make Space contemporary youth clubs and have helped set
up sporting activities through these clubs. It awards the Nestlé Smarties Book Prize,
for children under 11. It sponsors the schools publication Key Skills in Context,
whose section on ‘Nutrition’ does not warn about the dangers of eating too much
chocolate or sweets. Other Nestlé material states:
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Nestlé- Baby Milk and Other Ethical Issues Briefing Note
‘The good news is that sensible snacking can play a very important role in a
healthy diet and healthy lifestyle. In fact, some experts theorise that our
bodies were meant to eat this way. Current research suggests that having
numerous smaller meals over the course of the day helps to keep your bloodsugar levels on a more even keel.’
On the other hand Nestlé does state its commitment (Nestlé and Nutrition, 2003)
to:
‘Responsible advertising and marketing to children, and we have internal
marketing codes to formalise that commitment. We adhere to voluntary
guidelines, such as the International Chamber of Commerce Rules on Children
and Young People and Marketing.’
In this context it is worth noting that Nestlé is one of the world’s leading food
companies in terms of funding research and development to design healthier foods.
The company has pioneered a range of products such as ‘Sveltesse’ that either have
lower calories, or can assist in weight reduction. It is also a pioneer of foods that
may have positive effects on health, the latter sometimes being called ‘functional
foods’. A good example would be ‘probiotics’ i.e. yoghurts containing natural
bacteria that actually inhibit the growth of harmful bacteria in the stomach such as
Helibacter pyliori which are linked to the development of ulcers. Over the past 5
years Nestlé has developed or reformulated over 700 products globally to lower fat,
sugar and salt. In the UK that has included the removal of TFAs from confectionery
products, salt reduction in cereals and in soups and sauces.
6.5
GM Foods
There is a wide gulf between the US, where GM foods appear to be widely
accepted, and Europe where they are regarded with great suspicion by the majority
of consumers. Indeed, GM foods were banned by the European Commission until
the US government forced the EU to drop this ban under WTO trade rules. Nestlé
has stated that it will use GM foods where permitted, and if customers want them.
6.6
Water Misuse
Globalisation has led many multinational companies to significantly expand the
scale of their operations in developing countries. In the food industry, there are
growing concerns that soft drink companies may be digging wells that drain the
local water table. For example, in January 2004 Christian Aid published a report
entitled Behind the Mask- the Real Face of CSR. Behind the Mask accused CocaCola of starving Indian villagers of water in the southern Indian state of Kerala,
where wells are failing to keep up with the demand. This is particularly
devastating in a community that is mostly dependent upon agriculture. It stated
that villagers are demonstrating outside the company’s bottling plant in
Plachimada.
There is a similar controversy involving Nestlé in Brazil. It is alleged that a Nestlé
plant is depleting an aquifer in a historic spa town in that country. In October 2004
a group of Catholic and Protestant clergy visited the European Social Forum on
Water complaining about Nestlé. However production ceased on October 31st 2004.
In addition extractions were below the limits set by the authorities. Further the
authorities conducted tests which found extractions to be sustainable and with no
proven links between our operations and the allegedly declining water level in
other springs in the area.
November 2004
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